1. Use the basic accounting equation to answer the following:

a. Kendrick Company has total assets of $150,000 and total liabilities of $90,000. How much is the company's total stockholders' equity? $

b. Gassol Company has total liabilities of $120,000 and total stockholders' equity of $112,500. What are the company's total assets? $Answer

c. If Brown Company's total assets increased by $22,500 during the year and its total liabilities decreased during the same year by $15,000, what was the change in the company's total stockholders' equity? $

Increases or decreases? 2. Jenkins Company has the following items at year-end:

Currency and coin in safe	$7,700
Funds in savings account	55,550
Funds in checking account	14,850
Traveler's checks	1,100
Non-sufficient funds check	1,870
Money market fund	71,280

How much of the above, in total, should be reported as cash and cash equivalents on Jenkins Company's balance sheet? $

3. Smith Company purchases $60,000 of inventory during the period and sells $18,000 of it for $30,000. Beginning of the period inventory was $3,000. What is the company's inventory balance to be reported on its balance sheet at year end?

Select one:

a. $3,000

b. $2,000

c. $45,000

d. $18,000

4. Match the following organizational attributes in the left column with the organizational form in the right column. More than one organizational form may be associated with a given attribute.

1. Unlimited liability	Sole proprietorship
2. Full control	Partnership
3. Business income combined with owner(s) income for income tax purposes	Corporation
4. Relatively more difficult to establish	Sole proprietorship, partnership
5. Easier to raise funds	Partnership, corporation

5. The operating-cash-flow-to-current-liabilities ratio is computed by dividing a firm's a net cash flow from operating activities by:

Select one:

a. Current liabilities at the end of the period

b. Current liabilities at the beginning of the period

c. Total liabilities at the middle of the period

d. Average current liabilities for the period

e. None of the above

6. Scott Corporation produces a part for use in the production of one of its products. The per-unit costs associated with the annual production of 1,000 units of this part are as follows:

Direct Materials		$10.50
Direct labor		$24.00
Variable factory overhead		$ 5.50
Fixed factory overhead		$12.00
Total Costs		$52.00

$5,000 of the fixed factory overhead costs associated with the production of this product are common fixed costs.

Larson Company has offered to sell 1,000 units of the same part to Scott Corporation for $42 per unit. Scott should:

Select one:

a. make the part, because this would save the company $5,000 annually.

b. buy the part, because this would save $10.00 per unit.

c. make the part, because this would save $2.00 per unit.

d. buy the part, because this would save the company $5,000 annually.